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Differences in Local Rice Price Volatility, Climate, and Macroeconomic Determinants in the Indonesian Market

Agie Wandala Putra (), Jatna Supriatna (), Raldi Hendro Koestoer () and Tri Edhi Budhi Soesilo ()
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Agie Wandala Putra: Department of Meteorology, Indonesian Agency for Meteorology Climatology and Geophysics, Jakarta 10720, Indonesia
Jatna Supriatna: Department of Biology, Faculty of Mathematics and Natural Sciences, Universitas Indonesia, Depok 16424, Indonesia
Raldi Hendro Koestoer: The Coordinating Ministry of Economic Affairs Republic Indonesia, Jakarta 10710, Indonesia
Tri Edhi Budhi Soesilo: School of Environmental Science, Universitas Indonesia, Jakarta 10430, Indonesia

Sustainability, 2021, vol. 13, issue 8, 1-21

Abstract: Rice is a staple food in most Asian countries, and food security is often viewed as having a rice supply to avoid a food crisis. The large number of people who have low incomes means there is a risk of household economic conditions being threatened when food prices are not controlled. We present a different approach by measuring rice price volatility at the local market level with climate and macroeconomic variables. The model succeeds in representing the variables that affect rice prices by an average of 75% nationally. The influence of macroeconomic variables and climate dynamics was found to have a non-uniform pattern from one region to another. The factors that dominate the volatility of rice prices in each province were different. To help address these problems, it is suggested to model and integrate climate data and macroeconomic variables. The output can be used to determine national policies for controllable factors and anticipate climate dynamics to reduce the risk that communities will have difficulty accessing food.

Keywords: food security; price volatility; macroeconomic determinants; climate dynamics (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
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